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2 Threats to Apple This Week

Another Monday, another Apple (NASDAQ: AAPL) sell-off. Starting the week with losses of over 1% on a flat market day is simply standard procedure for Apple shares these days, and today is no different. The iPhone maker is facing two competitive threats this week, and investors are beginning to think that rivals are starting to catch up.

Wireless carrier AT&T (NYSE: T) has now announced official pricing and availability of BlackBerry's (NASDAQ: BBRY) new Z10 flagship smartphone. The first BlackBerry 10 device will launch on March 22 with standard high-end pricing of $200 on contract, which is the same starting price point of the iPhone 5 and other flagship devices. Ma Bell will begin taking pre-sale orders starting tomorrow.

Keep in mind that AT&T has always been predominantly an iPhone carrier ever since it enjoyed iPhone exclusivity for the first few years. Since then, the iPhone's percentage of total smartphone activations on the network has steadily risen and reached an all-time high of 84% last quarter.

Source: SEC filings. Calendar quarters shown.

AT&T has been trying to wean its reliance on the iPhone since it carries such pricey subsidies. However, the Z10 similarly carries a hefty $600 retail price, which implies that AT&T is still on the hook for an expensive subsidy on Z10 sales. There's very little room for non-iPhone devices, as other OEMs divvied up just 16% of smartphone activations last quarter.

More important than the Z10 is Samsung's Galaxy S IV that is set to be unveiled on Thursday at its "Unpacked" event in New York. The South Korean company's Galaxy S Series is the most viable threat to the iPhone, even though Apple is still able to easily outsell Samsung's flagship on a worldwide basis. The next-generation model will likely give Samsung a boost in the short-term, though, ahead of a possible iPhone launch this summer.

With two rival flagship smartphones either being launched or unveiled this week, investors are letting fear get to them by selling shares and ignoring the fundamentals.

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Comments from our Foolish Readers

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I don't understand why so many people are worried about other product that might compete with apple products. I had a samsung smart phone and felt it served its purpose, except I had to replace it twice because of defects. Then a friend of mine got a iphone 4 and after I started to play with it I was hooked. Shortly after I traded up to a iphone 5. You have to start somewhere until you find the best product which was apple for me. How many others will follow my lead?

Aapl ended up 1.42% for the day with late day rally.You should have posted this article earlier in the day.It is so ridiculously clear by the articles posted by bloggers that they try to drive the share price down.Hedge funds and serious investors don't read these silly articles.....I read them for amusement and to know when to invest in a company.The more negative the articles the more confident I become to buy shares.

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Evan is a Senior Technology Specialist at The Motley Fool. He was previously a Senior Trading Specialist at a major discount broker. Evan graduated from the University of Texas at Austin, and is a CFA charterholder.
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